The Lord Chancellor Shabana Mahmood announced the rise last week in response both to Consumer Price Index inflation since 2021, when whiplash reforms took effect and tariffs were introduced, and forecasted inflation to May 2027, when the next statutory review is likely to take place.
Under the Civil Liability Act 2018, the Lord Chancellor sets a tariff for whiplash injuries of up to two years in duration and makes regulations to do so, and is required to review those regulations within three years of implementation. The Act also banned offers to settle claims without medical evidence.
Mahmood kept the existing split structure of whiplash only and whiplash plus minor psychological injury tariffs, and the allowable judicial uplift of 20% of the tariff award for exceptional injuries or circumstances. She made no change to the definitions of what constitutes appropriate medical evidence and who may provide it prior to an offer to settle being made.
However, APIL president Kim Harrison said: ‘Following this review injured people will receive less compensation in real terms than they did in 2021 when the tariff was introduced.
‘If the Lord Chancellor were simply to increase the actual tariff, as introduced, in line with inflation using the Consumer Price Index, rather than making convoluted predictions about future inflation, the increase to damages in the tariff would be 22%. Increases in inflation have been eroding injured people’s damages since the tariff was introduced, a tariff which was set at an insulting, arbitrary level to begin with.
‘The facts are that since the tariff came into effect, the number of claims has plummeted, the cost of injury claims to insurers has nosedived, and yet motor premiums have continued to rise.’
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